Miami-based home builder Lennar looks to build upon its recent winning ways since bottoming in April. Shares had fallen as much as 47% from their September 2024 peak, but are starting to see their fortunes turn around. Interest rates play an integral role in their success and the anticipation of Fed rate cuts and a drop in mortgage rates has led to a nice rally. We will discover how much that rally continues after the Fed decision Wednesday afternoon and when it reports its individual results on Thursday after the bell. Shares have fallen after each of the last eight earning’s reports an average of 5%. That’s not a streak that gives me great hope over the near term, but what does entice me is the technical set-up from both a short-term and long-term basis. Let’s look at the short-term first – a one-year daily chart. Technically, this is a great rounded bottoming formation – one of my favorite reversal patterns. The set-up for the turnaround to continue is there with upside targets of $180 if price can break above this $140/$145 area of resistance. Shares continue to show great bullish technical signs as it has made consistent higher lows, broken above both the 50-day and 200-day moving averages and has even formed a bullish golden cross (in green). To the downside, any stumble in price may only be that — a stumble may not end the recent run. Look for two support areas to hold if tested and the stock can still remain in its bullish pattern. Look for buyers to step in at $130 and just under $125 above both key moving averages. There’s an old technical adage – when in doubt, back it out. To confirm my risk/reward set-up on the shorter term, I look at price action over a three-year weekly time frame. Much to my delight I see a similar pattern develop with defined risk/reward metrics that favor entering the stock on any break above $140. In fact, if one were buy ahead of earnings the downside risk is clear based on both metrics. If shares can hold above $125 based on near term support or a slightly better level – $129 on longer term support – the stock has a the runway to reverse with targeted upsides of $180 on a breakout and hold above $140. DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer.
